Wednesday, June 1, 2016

Global wine imports

In a previous post I presented the 2015 data on Wine exports for different countries. This leads to an obvious question, about who is importing this exported wine.

The first graph here shows the top 7 countries according to the 2015 data recently provided by the International Organisation of Vine and Wine (OIV), in terms of volume of wine imported.

Top countries for wine imports by volume

Most of these countries are not big wine-exporting countries, but both the USA and France apparently both export and import large amounts of wine.

To work out what is going on here, we can consider the monetary value of the wine. After all, it makes a difference whether one is importing cheap wine or expensive wine. This is shown in the next graph.

Top countries for wine imports by money

It turns out that the USA is spending much more money than other countries on the wine that it imports, while France does not even make it into the list of the top 6 countries by price. So, France is mainly importing cheap wine and exporting expensive wine. Apparently, the situation is that the French (i) export their own expensive wines, and (ii) import cheap wine in bulk (mainly from Spain), bottle it, and then re-export it (with a French label).

This situation becomes clearer if we combine the two data sets, and thus calculate who spends the most money per volume of imports. This is shown in the third graph.

Top money-spendng countries for wine imports

Clearly, the USA is importing more expensive wine than is anyone else. Since the USA is also a big producer and exporter of wine, there is clearly some delicate balance going on. The US exports wine at an average of 332 euros per hectolitre and imports wine at an average of 441 euros per hectolitre, so that there is a net trade deficit. Presumably the cheapest wine is staying within the country, in general, to create this difference in average prices.

This contrasts with Germany, for example, which exports wine at an average of 265 euros per hectolitre and imports wine at an average of 163 euros per hectolitre. Thus, the Germans are generally importing cheap wine, which presumably reflects a desire for wine that cannot be produced within the country (in this case, inexpensive red wine).

Canada, China and the UK also cannot meet their wine needs from domestic production alone. In the case of Canada and the UK this is for climatic reasons, as it also is in Germany. They therefore import both cheap and expensive wines. China, on the other hand, is rapidly expanding its vineyard area and wine production, which covers many suitable climatic zones. Presumably, its imports will decrease in the future.

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